What’s next for Cedar Fair?

Cedar Fair Entertainment Company is nearing a crossroads as critical decisions loom.

The company’s board of directors is searching for someone to replace Dick Kinzel, 70, a long-respected amusement park operator who has served as Cedar Fair CEO since 1986.

Kinzel has been pivotal in building the company into the undisputed roller coaster capital of the world.

The board, meanwhile, is under pressure to hire a new chairman who has no previous ties to the company.

The board is also being asked to increase cash payouts for investors.

Cedar Fair itself, meanwhile, may even be targeted for a merger with the rival Six Flags amusement park chain.

As the decisions are made, local officials will be watching for any effects on Sandusky, home to Cedar Fair’s corporate headquarters and home to its flagship park, Cedar Point.

On Jan. 11 unitholders were called to a special meeting by dissident investor Geoffrey Raynor, where they voted on two proposals from Raynor’s group of companies, Q Investments.

One proposal: Appoint a new chairman of the board — someone with no ties to Cedar Fair.

Kinzel currently serves as president, CEO and board chairman.

The other proposal: Make cash dividend payments to investors a higher priority, rather than focusing on paying off the company’s debt.

Preliminary results show the proposal to obtain a new independent chairman passed overwhelmingly, Kinzel said at the Jan. 11 meeting.

The outcome of the other proposal was too close to call, Kinzel said, and the vote will be announced in “several days.” As of Friday afternoon, the official tally still hadn’t been released.

On Dec. 6 Cedar Fair’s board said it’s looking at CEO candidates from inside and outside the company, and it hopes to announce a hire by the end of June.

But the vote for a new board chairman could complicate the search, since Q Investments is pressing for the new chairman to be hired as soon as possible.

Ultimately, the new chairman ought to be allowed to participate in the hunt for a new CEO, said Scott McCarty, portfolio manager for Q Investments.

“We would like the new chairman to have a significant role in the process,” McCarty said. “It serves all unitholders the best to have a truly independent chairman when selecting a new CEO.”

Cedar Fair’s board said it’s not bound by the unitholder vote, and board members haven’t revealed just how quickly they’ll move to name a new chairman.

Kinzel and other Cedar Fair officials declined repeated requests for interviews last week.

Even if Kinzel leaves his post as chairman, he’ll remain on the board — in June 2010, he was re-elected to a new three-year term.

Jay Barney, a professor at the Fisher College of Business at The Ohio State University, said the unitholder vote on the new chairman suggests Cedar Fair will consider bringing in an outsider to fill the CEO’s spot.

“It would be difficult for an insider to tell a convincing story to the board that they were distinctive enough from the prior leadership that shareholders would be satisfied with that,” said Barney, who specializes in corporate management.

And given the role Raynor has played in recent Cedar Fair decisions, “obviously, whoever they get will have to pass muster with this guy,” Barney said.